Auctions for PURPA Purchases: A Simulation Study

Publication Type

Journal Article

Date Published

01/1990

Abstract

Competition was introduced into the electric utility industry with the passage of the Public Utilities Regulatory Policy Act (PURPA) of 1978. Increasing interest has appeared in structuring the PURPA purchase market into an auction system. This paper addresses the design issues associated with setting up such markets and introduces a simulation model to study them. The simulation analysis is guided by theoretical issues such as the alleged inefficiency of first-price auctions. We find that efficiency concerns raised about first-price auctions turn out to be less important than simple theoretical concerns would suggest.

Journal

Journal of Regulatory Economics

Volume

2

Year of Publication

1990
129

Issue

2

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Research Areas: